Fort Smith woman begins sentence for Ponzi scheme
A 66-year-old Fort Smith woman has reported to a federal prison in Texas to begin serving a 50-month sentence in connection with a multimillion-dollar Ponzi scheme she ran through her companies in New Jersey.
Shirley Sooy, an Arkansas native, pleaded guilty last year in federal court in Newark, N.J., to wire fraud and money laundering in connection with the Ponzi scheme.
She began serving her sentence on July 10 at Federal Medical Center, Carswell in Fort Worth, which has a minimum-security satellite camp.
Prosecutors said in 2014 Sooy and her co-conspirators netted $42 million through the scheme and used some of that money to buy a $135,000 Maserati automobile and a 48-foot yacht.
They subsidized millions of dollars in personal expenses, according to the criminal complaint.
The money was used to make mortgage payments on personal properties owned by Sooy and others in Bloomsbury, Phillipsburg and Waretown, N.J., as well as Palm Beach Gardens, Fla. Some of the money was also used to make payments on personal credit cards and to remodel Sooy’s home, according to the court filing.
In May, U.S. District Judge William Walls sentenced Sooy to 50 months in prison on each of two counts, with the sentences to run concurrently. He also ordered her to pay $1,185,404 in restitution.
Sooy owned a group of freight payment, logistics and shipping businesses headquartered in Branchburg, N.J. The companies operated under the umbrella name TransVantage Group.
From 2010 through 2013, through TransVantage, Sooy entered into contracts with four unnamed “victim companies,” according to the criminal complaint.
But in the judgment, issued in May, 20 victim companies were listed. Those with the greatest losses from the Ponzi scheme were Johnson Controls Inc. of Plymouth, Mich., with a loss of $399,936; Amcor Rigid Plastics USA of Manchester, Mich., with a loss of $184,246; and Albemarle Corp. of Baton Rouge, with a loss of $108,769.
“TransVantage audited freight bills generated by common carriers and freight forwarders hired by the victim companies,” according to a news release in May from acting U.S. Attorney William Fitzpatrick of New Jersey.
TransVantage was supposed to pay the audited and approved freight bills from funds provided by the victim companies, according to Fitzpatrick. The funds were to be held in trust by TransVantage until paid over to the carriers.
But instead of paying the carriers the amount due, Sooy and others commingled the funds from the victim companies and then misused those funds in various ways, according to the news release.
According to charges filed in federal court, Sooy served at different times between 2003 and 2008 as director of operations and president of TransVantage. Beginning in 2010, she became the sole shareholder of the company.
According to the initial complaint, the scheme began to unravel in May 2013 when one of the victim companies learned its carriers hadn’t been paid by TransVantage, even though the victim company had paid TransVantage.
During an audit in 2013, Sooy stated that a multimillion-dollar “cash hole” had existed at TransVantage for years, and that a victim company’s money was used to “fill the hole,” according to the complaint. Sooy told auditors some of the victim company’s money had been invested and lost in the stock market years earlier, according to the court document.
In a 2013 deposition, Sooy stated she went into “panic mode” when she learned in 2010 a co-conspirator had used some of the victim companies’ money to make loans to third parties, and TransVantage had a deficit.
“She nonetheless continued to operate TransVantage and did not inform the victim companies,” according to the criminal complaint.
In 2010, the amount that had been paid by the victim companies, but which was not used to pay carrier freight bills, was about $13 million, according to the criminal complaint.
“By 2013, when the scheme collapsed, it was approximately $42 million,” according to the court document.
The owners of other companies then realized they too were victims.
Shirley Darlene Rauls Sooy of Dacula, Ga., married Ronald Thompson of Fort Smith on May 9, 2014, in Fort Smith, according to records of the Sebastian County clerk’s office. The bride and groom were both 63 years old at the time of the marriage, and both were born in Arkansas.